U.S. Reps. Don Manzullo (R-IL) and Jay Inslee (D-WA) today introduced bipartisan legislation to protect Internet music Web casters from unfair government regulations that threaten to put them out of business and end the access to music over the Internet for more than 70 million Americans.

The Internet Radio Equality Act would reverse a recent decision of the federal Copyright Royalty Board (CRB) to at least triple the amount of royalties Internet radio broadcasters pay to copyright holders for playing a song.

In March, the CRB drastically increased royalty rates for webcasters – starting retroactively at $0.0008 per song in 2006 and climbing to $0.0019 per song in 2010. Though it costs only fractions of a penny per song, the change amounts to a 300 percent cost increase for the largest webcasters and up to a 1200 percent increase for smaller operations. These increases would bankrupt many Internet music Web casters and force U.S. radio stations to stop streaming their programs on the Internet.

“The Internet has provided us with amazing opportunities to enjoy music, and this unfair action by the Copyright Royalty Board threatens to take it all away,” Manzullo said. “Our legislation overturns the huge rate increases and sets up a system that is fair to Web casters, web users and the artists whose music we all enjoy. And most importantly, it will keep music playing on the Internet.”

“This Titanic rate increase is simply untenable for many Internet radio broadcasters,” said Inslee, a member of the House Energy and Commerce Subcommittee on Telecommunications and the Internet. “You can’t put an economic chokehold on this emerging force of democracy,” he added. “There has to be a business model that allows creative webcasters to thrive and the existing rule removes all the oxygen from this space.”

The legislation would provide royalty parity for Internet radio providers. It would vacate the CRB’s March 2 decision and apply the same royalty rate-setting standard to commercial Internet radio, as well as satellite radio, cable radio and jukeboxes. A transition rate of 7.5 percent of revenue would be set through 2010.

According to Nielsen Media Research, 70 million Americans listen to online radio each month.

April 27, 2007 (Computerworld) In a show of bipartisan support for online radio, U.S. Reps. Jay Inslee (D-Wash.) and Donald Manzullo (R-Ill.) have filed legislation they hope will "prevent the demise of Internet radio."

The Internet Radio Equality Act would reverse a recent decision by the federal Copyright Royalty Board that would at least triple the amount of royalties Internet radio broadcasters must pay to copyright holders to play a song, according to a statement from Manzullo's office.

Under the board ruling, royalty rates will be changed from a percentage of revenue to a per-song, per-listener fee. The entities affected include pure-play Internet radio stations, digital music stations like Pandora.com and traditional broadcast stations that also stream their programs. The new rates, which would be retroactive to 2006, would increase until 2010.

According to Inslee and Manzullo, the new rates amount to a 300% increase for the largest webcasters and up to a 1,200% increase for smaller operations.

The Inslee-Manzullo Internet Radio Equality Act would provide royalty parity for Internet radio providers, the statement said. It would vacate the royalty board's decision and apply the same royalty rate-setting standard to commercial Internet radio, as well as satellite radio, cable radio and jukeboxes. A transition rate of 7.5% of revenue would be set through 2010.

"The Internet has provided us with amazing opportunities to enjoy music, and this unfair action by the CRB threatens to take it all away," said Manzullo in the statement. "Our legislation overturns the huge rate increases and sets up a system that is fair to webcasters, Web users and the artists whose music we all enjoy. And most importantly, it will keep music playing on the Internet."

Christine Hanson, Inslee's spokeswoman, said "Congressman Inslee has been a long-term proponent of media diversity. He thinks that putting radio broadcasters out of business because of these fees is not in the best interests of democracy."

The SaveNetRadio coalition applauded the legislation and said it could save thousands of webcasters from bankruptcy.

"Since the CRB's March 2 decision to dramatically and unfairly increase webcaster royalty rates, millions of Internet radio listeners, webcasters and artists have called on Congress to take action," said Jake Ward, of the SaveNetRadio coalition, in a statement. "Congress took notice, and we thank Messrs. Inslee and Manzullo for leading the charge to save music diversity on the Internet."

About time they did somthing for the small radios on the net... evrytime we get somthing good in AMERICA THE GREAT the fucking government or other fucks us over an take it away. Its a wonder why i even bother living in this asshole of the planet.

About time they did somthing for the small radios on the net... evrytime we get somthing good in AMERICA THE GREAT the fucking government or other fucks us over an take it away. Its a wonder why i even bother living in this asshole of the planet.

Legislation that would overturn a decision that threatens to put Internet webcasters out of business because of dramatically higher royalty payments has been introduced in both bodies of Congress.

If passed, the Internet Radio Equality Act would vacate the recent ruling by the U.S. Copyright Royalty Board (CRB) that raised payment rates for music on the Internet by 300 to 1200 percent. It would reinstate the current standard of paying 7.5 percent of the broadcaster’s revenue.

Sens. Sam Brownback, R-KS, and Ron Wyden, D-OR, co-sponsors of the Senate bill, said they supported independent Web services that stem from Internet radio broadcasts. “Keeping Internet radio alive is part of a broader issue that is important to me — keeping the e-commerce engine running by preventing discrimination against it,” Wyden said.

The new rates were scheduled to take effect on May 15, retroactive to the beginning of 2006, but the CRB agreed to extend the date to July 15, giving the opposition more time to lobby Congress to pass legislation and to raise awareness of the issue.

SoundExchange, the royalty collections division of the recording industry, pushed the CRB for the higher rates. The new rules require that royalties be paid for streaming a single song to a single listener.

Webcasters say the cumulative effects of the royalty payments would be too much for all but the biggest Internet radio sites to handle, putting them out of business. The new rules also mandate flat minimum payments to be paid for any streaming in addition to the royalty payments.

National Public Radio (NPR) lost an appeal to the CRB, but has filed an appeal in Washington, D.C., district court to stop the new rules from taking effect.

May 24, 2007 (Computerworld) SoundExchange, the group that collects royalties from Internet radio broadcasters, is offering small Net radio stations more time before they would have to pay newly approved higher royalty rates to stream music online.

SoundExchange has offered small Internet radio stations until 2010 before they would have to pay higher rates set by the federal Copyright Royalty Board in March. Large radio stations would have to pay the new increased rates.

The offer by SoundExchange, which was set up by the Recording Industry Association of America to collect royalties for performers and record companies, puts a cap on the amount of revenue a small online radio station could earn and also caps how much music the webcasters could stream online. A small radio station is defined as having annual revenue of $1.25 million or less.

But a spokesman for SaveNetRadio, a group that represents online radio stations, slammed the proposal as "hollow" and said it would limit the growth of small webcasters.

Earlier this year, the federal Copyright Royalty Board set rates that would at least triple the amount of royalties Internet radio broadcasters must pay to copyright holders to play a song.

Under the board ruling, royalty rates will be changed from a percentage of revenue to a per-song, per-listener fee. The entities affected include pure-play Internet radio stations, digital music stations like Pandora.com and traditional broadcast stations that also stream their programs. The new rates, which would be retroactive to 2006, would increase until 2010.

Federal lawmakers have filed legislation that would reverse the board's decision.

SoundExchange said its offer comes as a response to a request from the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property to "initiate good-faith private negotiations with small commercial and noncommercial webcasters with the shared goal of ensuring their continued operations and viability."

"This offer is not about displacing the judges' correct analysis of the market, but rather about extending for a limited time the below-market rates that these small businesses received several years ago. We have heard the concerns of Congress and we are responding," said Michael Huppe, general counsel of SoundExchange, in the statement.

But SaveNetRadio is not impressed with SoundExchange's offer.

"It's a hollow offer and it's a bit insulting to small webcasters to think that they would be willing to limit their potential growth by accepting the terms of a proposal that would doom them to stay small forever by putting in place revenue caps and [usage caps] that SoundExchange still claims are up for negotiation," said SaveNetRadio spokesman Jake Ward.

"This was an attempt by SoundExchange to derail what is a very aggressive and legislative effort to find a structural solution that will allow the industry to survive and to grow as a whole and that will allow small webcasters to build an audience and become successful," Ward said. "With the rejection of this proposal, that [legislative] effort is going to continue."